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Abhoy Sarkar's Avatar
published in Blogs
Mar 31, 2022

Paychex (PAYX, $136.89) beats Q3 earnings expectations

Paychex posted its third quarter earnings and revenue, both of which surpassed analysts' expectations.

The human resource/payroll company’s earnings came in at $1.15 a share, well above the $1.05 a share expected by analysts polled by Investing.com.

Revenue of $1.28 billion also beat expectations of $1.22 billion.

Paychex revenues from its Management Solutions segment increased +13% from the year-ago quarter to $959.9 million. Professional employer organization (“PEO”) and Insurance Solutions revenues were up +21% from the year-ago quarter to $301.7 million.

For fiscal year 2022, total revenues are now expected to register 12-13% growth compared with the prior expectation of 10-11%. Adjusted earnings per share are now expected to register 22.5-23% growth compared with the prior expectation of 18-20%.

Growth in management Solutions revenues are now expected to be in the range of 12-13% compared with the prior forecast of 10-11%. PEO and Insurance Solutions revenues are now expected to grow 13-14% compared with the previous outlook of 10-12%.

Adjusted operating margin is expected to be almost 40% compared vs. prior expectation of 39-40%. Adjusted EBITDA margin is now expected to be nearly 44-45% compared with the prior expectation of 44%.

Related Ticker: PAYX

PAYX in upward trend: 10-day moving average broke above 50-day moving average on June 05, 2023

The 10-day moving average for PAYX crossed bullishly above the 50-day moving average on June 05, 2023. This indicates that the trend has shifted higher and could be considered a buy signal. In of 11 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .

Price Prediction Chart

Technical Analysis (Indicators)

Bullish Trend Analysis

The Momentum Indicator moved above the 0 level on June 02, 2023. You may want to consider a long position or call options on PAYX as a result. In of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .

The Moving Average Convergence Divergence (MACD) for PAYX just turned positive on June 02, 2023. Looking at past instances where PAYX's MACD turned positive, the stock continued to rise in of 50 cases over the following month. The odds of a continued upward trend are .

PAYX moved above its 50-day moving average on June 02, 2023 date and that indicates a change from a downward trend to an upward trend.

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where PAYX advanced for three days, in of 347 cases, the price rose further within the following month. The odds of a continued upward trend are .

The Aroon Indicator entered an Uptrend today. In of 362 cases where PAYX Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .

Bearish Trend Analysis

The Stochastic Oscillator has been in the overbought zone for 2 days. Expect a price pull-back in the near future.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where PAYX declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

PAYX broke above its upper Bollinger Band on June 05, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.

Fundamental Analysis (Ratings)

Fear & Greed

The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 80, placing this stock better than average.

The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.

The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.

The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. PAYX’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.

The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.

The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (11.862) is normal, around the industry mean (8.117). P/E Ratio (26.954) is within average values for comparable stocks, (26.200). Projected Growth (PEG Ratio) (2.712) is also within normal values, averaging (2.024). Dividend Yield (0.029) settles around the average of (0.037) among similar stocks. PAYX's P/S Ratio (8.244) is very high in comparison to the industry average of (1.598).

Industry description

Personnel Services comprise companies that provide staffing and human resources management solutions for businesses. Each company might be involved in one or more types of recruitment or employee solutions such as permanent or temporary staffing, career consulting, outsourcing, administrative services and many more. Some personnel services companies cater to large businesses, while some specialize in providing services to small/medium-sized organizations. These specialized services potentially expedite the process of getting the ‘right’ candidates and/or training them to meet the requirements of a business process. Some of the companies also cover other critical areas like internal auditing for a company. Robert Half International Inc., ManpowerGroup Inc. and Insperity, Inc. are examples of companies in the personnel services industry.

Market Cap

The average market capitalization across the Personnel Services Industry is 6.84B. The market cap for tickers in the group ranges from 114K to 89.54B. ADP holds the highest valuation in this group at 89.54B. The lowest valued company is FRSI at 114K.

High and low price notable news

The average weekly price growth across all stocks in the Personnel Services Industry was 5%. For the same Industry, the average monthly price growth was 5%, and the average quarterly price growth was -1%. RCRT experienced the highest price growth at 23%, while STAF experienced the biggest fall at -20%.

Volume

The average weekly volume growth across all stocks in the Personnel Services Industry was -51%. For the same stocks of the Industry, the average monthly volume growth was 39% and the average quarterly volume growth was 9%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 41
P/E Growth Rating: 55
Price Growth Rating: 53
SMR Rating: 53
Profit Risk Rating: 79
Seasonality Score: -3 (-100 ... +100)
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Technical Analysis# Of IndicatorsAvg. Odds
   
   
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A.I.Advisor
published price charts
A.I. Advisor
published General Information

General Information

a provider of payroll processing and other human resources services

Industry PersonnelServices

Profile
Fundamentals
Details
Industry
Data Processing Services
Address
911 Panorama Trail South
Phone
+1 585 385-6666
Employees
16000
Web
https://www.paychex.com
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PAYX and

Correlation & Price change

A.I.dvisor indicates that over the last year, PAYX has been closely correlated with ADP. These tickers have moved in lockstep 88% of the time. This A.I.-generated data suggests there is a high statistical probability that if PAYX jumps, then ADP could also see price increases.

1D
1W
1M
1Q
6M
1Y
5Y
Ticker /
NAME
Correlation
To PAYX
1D Price
Change %
PAYX100%
+0.45%
ADP - PAYX
88%
Closely correlated
-0.12%
NSP - PAYX
60%
Loosely correlated
+3.28%
RHI - PAYX
58%
Loosely correlated
+1.69%
MAN - PAYX
58%
Loosely correlated
+2.32%
BBSI - PAYX
55%
Loosely correlated
+3.58%
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